Some borrowers can still enjoy good mortgage deals
April 11, 2008
Some officials have recently stated that there are still some competitive mortgage deals available for borrowers despite the gloomy predictions and outlook that has been seen in the mortgage sector of late. Officials from the online comparison site, mform, have stated that the outlook and panic relating to the mortgage market in the UK has been ‘overdone’ and there are still some competitive and affordable deals around for those that meet the lenders’ criteria.
Officials from the group went on to state that the different in interest rate for those that put down a 10% deposit compared to those that put down a 50% deposit is negligible, which means that those with a lower level of deposit will not suffer too much financially despite all of the worrying reports about lenders demanding higher deposit levels in order to provide access to their more favourable deals.
One official from mform stated: ‘Mortgage customers are undoubtedly facing challenging times but they are not as bleak as is being painted. People coming off two, three and five-year fixed rate deals this year will face higher monthly payments. However they will have benefited from house price increases and that will have enabled them to build equity and to substantially improve their loan-to-value.’
However, an official from the risk management group, Protiviti disagreed with this view, and stated: ‘Banks and building societies are not surprisingly reviewing their lending criteria and overhauling their risk management programmes in the light of the current market and economic situation with the aim of reducing their exposure to bad debt.’
Nearly half of brokers working for the firm said that they expected liquidity levels to get worse for mortgage lenders over the course of this year, which could make it even more difficult for borrowers to get finance for a mortgage.
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